A federal appeals court has revived a federal lawsuit accusing Bollinger Shipyards of lying about the strength of eight patrol boats it lengthened for the Coast Guard.
The 5th U.S. Circuit Court of Appeals ruled last week that a district judge was wrong to dismiss the suit against the Lockport shipyard, a subcontractor on a project to lengthen eight patrol boats from 110 to 123 feet.
The government wants Bollinger to repay $78 million.
Four of the boats were delivered in 2004. The hull of the first, the Matagorda, began to buckle at sea in September 2004. The Coast Guard accepted the other four after modifications to boost their hull strength, but it wasn’t enough, according to the ruling. The Coast Guard revoked its acceptance of all eight in 2007; the Justice Department sued in 2011.
Bollinger Shipyards has received Coast Guard contracts since the suit was filed in 2011. Bollinger has said this shows the Coast Guard still has confidence in the company.
U.S. District Judge Sarah Vance dismissed the suit last year, saying the suit “does not allege facts indicating that Bollinger’s initial representation of the hull strength was knowingly false or made in deliberate ignorance or disregard for the truth.”
A three-judge panel said the allegations are enough to warrant trial.
The Coast Guard asked whether the extended vessels would be strong enough, the judges said. The government alleges that Bollinger said they would exceed industry standards, even though shipyard officials knew this was untrue.
“Based on the facts set out in the complaint, one may reasonably infer that Bollinger acted ‘in reckless disregard of the truth or falsity’ of the measurements,” Judge W. Eugene Davis wrote for the panel.
He noted that an American Bureau of Shipping official offered a confidential assessment of the company’s analysis, but then-President and Chief Executive Officer Boysie Bollinger declined after Vice President T.R. Hamblin recommended he do so, “reflecting concern that the review would find that the design required additional structural support.”
“Relatedly, Bollinger falsely certified that the boats had been reviewed for unrestricted service by a representative of an independent agency, when Bollinger had not had any independent agency review them,” Davis wrote.
Separately last week, the chief operating officer of Bollinger Shipyards and the family that owns Edison Chouest Offshore acquired all of the assets and stock of Bollinger.
COO Ben Bordelon, a grandson of the founder who has served in a number of positions at Bollinger and as a board member since 2002, assumed the duties of chairman, president and chief executive officer at Bollinger Shipyards. Bordelon takes over from his uncle Donald “Boysie” Bollinger, chairman and CEO, and Boysie’s son, Chris Bollinger, president and board member.
Details of Bordelon’s ownership arrangement with the Chouest family and acquisition cost were not disclosed.